CIA/OPR /IM-303-75 p ’ 'V ■■■■ ' ClA FEB75 '^p'°™‘''’°15«N»DEMfWt““fWm MEMORANDUM- THE POLITICS OF ^ UNCERTAINTY: SPAIN PREPARES FOR, THE POST-FRANCO ERA - . ' / ; 01 OF or Approved For Rel boniiaential Intelligence Memorandum The Politia of Uncertainty: Spain Prepares for the Post-Franco Era Confidential OPR 303 February 1V75 Approved For Release 2003/05/28 : CIA-RDP86T00608R000600180001-7 Approved For Release 2003/05/28 : CIA-RDP86T00608R000600180001-7 CONFIDENTIAL CENTPAL INTELLIGENCE AGENCY DIRECTORATE OF INTELLIGENCE OFFICE OF POLITICAL RESEARCH THE POLITICS OF UNCERTAINTY: SPAIN PREPARES FOR THE POST-FRANCO ERA 25X1 A9A CONFIDENTIAL Approved For Rele ase 2 003/05/28 : CIA-RDP86T00608R0006001 80001-7 Approved For Release 2003/0S^j,^|l^|pP86T00608R000600180001-7 CONTENTS KEY JUDGMENTS DISCUSSION I. SPAIN AND THE PORTUGUESE MODEL II. ECONOMIC AND SOCIAL CHANGE HI. SPAIN UNDER FRANCO IV. THE CONSTITUTION V. THE POLITICAL ELITE VI. THE WORKING CLASSES AND COMMUNIST OPPOSITION VH. THE ROLE OF THE MILITARY VIH. STRESSES AND STRAINS IX. THE FUTURE If Franco lingers on If the Caudillo dies soon iii CONFIDENTIAL Approved For Release 2003/05/28 : CIA-RDP86T00608R000600180001-7 Approved For Release 2003/05/28 : CIA-RDP86T00608R000600180001-7 CONFIDENTIAL KEY JUDGMENTS FrancisT'o Franco is dying. While doctors within and without Spain disag. -20 as to just when the Caudillo will pass from the scene, all agree that his physical decline has begun, and that there is a general incapacitation ahead. At the moment, political figures of the e.xtreme right have 1 le greatest influence upon Franco, and continue to frustrate Prime Minister Arias Navarro’s attempts to add more flexibility to the political system. The current dominance of this extreme right dampene d the hopes of moderate politicians and groups who sup- ported A rias’ proposal to permit independent political associations in Spain. ^ oderates are now biding their time. Ur. dee Portugal before the revolution, Spain has a larger number of leaders and groups with governing experience, and these could grow into Jedgling political parties. If these groups are allowed to move out of their present quasi-legal status, they could assume an active and important role in guiding Spain toward a more pluralistic form of government. The outcome of the post-Franco succession will depe id, however, on how long the dictator lives and his current in- timacy with the extreme right wing — to the almost total exclusion of moderate politicians — continues: — Prospects are bleaker if Franco lingers on. The extreme right is likely to come to monopolize the political process, and prove to be inflexible in the face of growing unrest and demands for reform. As public order decays, the military might feel impelled to take over the reins of government to restore social peace. With the assumption of civilian roles, the officer corps will become politicized, and significant numbers of j, nior officers might turn radical as Spain’s major economic and social prob- lems remain unsolved. — Prospects are better if Franco dies soon. It would still be pos- sible for moderate individuals and groups to rally around Prime Minister Arias Navarro, and support his mildly reformist pro- gram. Co-operating informally with the military, an Arias government might accommodate restrained political de- mands, make some gestures to appease labor and regional protests, and attain some political stability through a plural authoritarianism. Whatever the eventual outcome, the unmediate future for Spain will be characterized by unrest and uncertainty, and politicians’ dis- trust of each other. 1 CONFIDENTIAL Approved For Release 2003/05/28 : CIA-RDP86T00608R000600180001-7 Approved For Release 2003/05/28 : CIA-RDP86T00608R000600180001-7 CONFIDENTIAL DISCUSSION I. SPAIN AND THE PORTUGUESE MODEL Francisco Franco has ruled Spain for nearly forty years, and the political structure designed to per- petuate his rule has few real roots in the population. As Franco's health declines his decisions are re- flecting a more rigid conserv^atism, and moderate groups are coming to think the reforms promised by Premier Arias Navarro are being betrayed. In the absence of widely based political parties, the military remains Spain’s single most poweiful or- ganization. Important groups both in and out of Spain are beginning to wonder if the recent Portu- guese revolution has any implications for Spain. Is the same scenario likely to unfold in Spain as re- cently occurred in Portugal? The forty-year old Portuguese dictatorship re- cently fell quickly, easily and unexpectedly. Politi- cal institutions disappeared almost overnight. Con- servative elements associated with the old regime were unable to regroup and organize. Exhilarated by a sense of release, the once repressed population kent escalating its political demands, and laborers engaged in a scries of wildcat strikes. The only dis- ciplined political force to emerge was the Com- munist party, and its leaders were able to influence a new military govertiment that is slowly drifting leftward. But Spain is not Portugal. Portugal is the least developed country in western Europe: at three percent its annual rate of growth is the lowest in Europe; modes of agricultural and industrial pro- duction are inefficient; and scarce economic and human resources were used to fight wars in Guinea, Angola and Mozambique between 1961 and 1974. The old political elite clung to outmoded policies and institutions, and was incapable of enacting cv'en moderate political reforms. On the other hand, Spanish rates of economic and industrial growth are high; Spain has not experienced the debilitating costs and demoralization of a long colonial war- Spaniards arc more educated than Portuguese, and Spain has a larger middle class with greater tech- nological competence. The Spanish political elite is thinking hard about the shape of the country with- out Franco, and beginning to prepare for the fu- ture. The outcome of events after Franco will turn on the resolution of the following key political questions: — how long will Franco live, and his current identification with the extreme right continue; — arc Spain’s institutions flc.xiblc and viable enough to incorporate now political forces released during a transition period; In retrospect the reasons for the downfall of the Gaetano regime seem obvious. Gaetano did not have the personal authority of Salazar; yet he as- sumed office in 1968 with promises of limited re- form and a flexible African policy. Over time these appeared to be empty gestures as the Prime Min- ister backed down, and came to rely solely on in- transigent, right-wing support. Moderates felt that options in the political arena were denied them. Finally in 1974, a group of career military officers, resenting their long assignments in Africa and the rapid promotion of reservists, politicized their dis- content and executed a coup detat. Without the presence of Salazar or a figure of comparable stature, the political system toppled completely. — what are the capabilities of Spain’s political elite; — how prepared are the working classes and radical opposition to co-operate with a post- Franco regime; — will the military intcrv'cne in politics? The succession will also be acted out as new pressures impinge upon the political system. The economy is c/iflng/ng. From an era of boom, rapid growth, and improving productivity, the Spanish economy is facing a period of inflationary strains, energy shortages and declining trade balances. Europe is changing. From aii area that appeared to offer Spain commercial benefits and intcTnational CONFIDENTIAL Approved For Release 2003/05/28 : CIA-RDP86T00608R000600180001-7 Approved For Release 2003/05/28 : CIA-RDP86T00608R000600180001-7 CONFIDENTIAL respectability, tiie Common Market now projects an image of political and economic disarray. Portu- g<d is changing. From a once somnolent and insig- nificant neighbor, Portugal is transforming itself into what may be a revolutionary nation on the Iberian peninsula. These events will influence the outcome of pohtical alignments and solutions in post-Franco Spain. II. ECONOAAIC AND SOCIAL CHANGE Between 1800 and 1940 Spain experienced 109 governments, twenty-four revolutions and three civil wars, and Francisco Franco assumed power in 1939 only after winning the last, devastating con- flict. To secure his victory Franco established st.ere repression, eliminated political competition, isolated the country from the rest of the world, and thus prevented economic growth for oi er a decade. For Ae sake of domestic peace the population was will- ing to submit to the restrictions of authoritarian rule. But in the past twenty years Spain has altered, and memories of civil war horrors have dimmed. Because of an industrial boom in the sixties and associated changes in demographic, literacy and consumption patterns, Spain is now on the way to becoming a modem nation. Spain today is a young nation with seventy percent of the population having at best faint recollections of the 1936-1939 period. Ninety per^'ent of the population is literate, and higher education is becoming more accessible to persons of lower middie-class origin. Nor is Spain an impoverished agricultural nation any longer: seventy-five percent of the labor force is employed in manufacturing and service industries while over 500,000 others have left the countryside for work in Common Market nations. Thanks to an industrial growth rate of ten percent, second only to Japans, sixty-five percent of all Spaniards own television sets, thirty percent own cars, and most consume on average about forty-five kilograms of meat a year. Through emigration, the annual inflow of twenty-eight million tourists and bilateral security arrangements with NATO members, Spaniards have also become more aware of Huropc. III. SPAIN UNDER FRANCO Only the political system has not kept pace. Francisco Franco remains the center of the Spanish political system; he is the head of the armed forces, Caudillo of the National Movement,* the church is dependent upon him for funds, and no organiza- tions that could successfully compete with the Movement have been permitted to exist. Without open arenas for exercising political talents and skills, individuals have tended to use legal institutions to further their own ambitions. In consequence v'ery few institutions in Spain are monolithic. Franco has countenanced the presence of competing fac- tions within and without government, military, and National Movement, and used them as the situation demanded. When for instance Spain’s economic and foreign policies w-ere autarkic and isolationist in the early fifties, right-wing elements dominated the cabinet; in later years modernizing technocrats presided over the opening up of the economy and international relations. All groups have always been dependent upon Franco for political influence. At the moment leaders of the cxtre.nc right are dominating policy decisions. They are not a co- hesive group, but men who have access to Franco because they fought with the Caudillo in the 1930’s or were early ideological defenders of the regime. These older civil war officers and Afovement founders can turn only to Franco because social and economic change has bypassed them. They have few institutional supports; younger officers in the military seem to favor strict professionalism, while the Movement is discredited in society, and its members are regarded as hacks staffing its’ owm inflated bureaucracy along with those of the in- effectual labor syndicates. The Movement is having trouble recruiting new members voluntarily, and a younger generation of leaders hopes for internal reforms to enable it to compete with other groups in post-Franco Spain. Thus as Franco s health fails, extreme rightists have banded together to dominate the Caudillo s few lucid moments and have thwarted moderate political change. The right appreciated its isolation when Franco temporarily gave up power in July of 1974, Although he resumed power in September, the possibilities *Thc National Movement, Spain’s only legal political party, was formed by merging the fascist fo/ange with the Carlist J.O.N.S. in 1937 to provide Franco with a political arm. All government employees, workers and university students are required to belong to the Movement or a Movement-sponsored organization. 3 CONFIDENTIAL Approved For Release 2003/05/28 : CIA-RDP86T00608R000600180001-7 Approved For Release 2003/05/28 : CIA-RDP86T00608R000600180001-7 CONFIDENTIAL for continued rule by the ailing eighty-t\vo year old dictator are not good. The leaders of the old right joined forces with members of the ultra-con- serv'ative Franco family to undermine Premier Arias Navarro’s attempt to permit independent political associations to organize. They succeeded: in Oc- tober Franco fired Pio Cabinillas, the liberal min- ister of information and tourism, and twelve other important officials resigned in protest; in November Franco listened sympathetically to Jose Antonio Giron, head of the newly-formed Civil War Vet- erans’ Association and former Falangist cabinet minister, w^ho protested any liberalization, how’ever moderate. Aftervard, in a demonstration of strength, the Movement rallied some 17,000 children to pledge support to the continuity of Franco s regime. Finally on 3 December, Arias announced that Franco w'ould only approve associations authorized and controlled by the Movement’s conscrv'ativc National Council.- Arias asked the public for patience, implying that greater changes would come after the Cau- dillo’s death. But the longer Franco lives, the more likely ultra-conservative decisions will become in- stitutionalized, thereby preventing the potentialities for change afforded by the constitution from being realized. IV. THE CONSTITUTION The Spanish constitution is designed to legitimize one-man rule. So long as Franco lives, he is chief of state, head of the armed forces and Movement, and arbiter of government policy. Although Prince Juan Carlos de Borbon is the designated monarch, he is not empowered to exercise any authority until Franco passes from the scene. The dictator also retains firm control of the government by presiding over bi-w'cekly cabinet meetings, and passing on proposed policies and laws. While the Cortes or legislature has the legal power to initiate, discuss and enact legislation, it has to date played only a pro forma role. Members of the Council of the Bcalm, w’hich is authorized to settle disputes between monarch, cabinet and Cortes, have hon- orary functions. ’Subsidiary requirements, which specify that each as- sociation have at least 25,000 members distributed over fifteen provinc'cs, further add to the difficulties of smaller moderate groups trying to organize. After Franco dies, power is to be divided among institutions without any traditions of independent authority. Prince Juan Carlos will inherit Franco’s mantle as chief of state, generalissimo of the armed forces and chief of the National Movement, but he will not be empow'ered to control the policies of government or Movement. The latter pow'ers will be vested solely in the prime minister, w^ho will also be able to call into question most decisions taken by the monarch. Nor will the strength of the Cortes be enhanced in post-Franco Spain; the legislature will not have the right to over-ride the chief of state’s veto or name the prime minister; eighty percent of its members will still be appointed, and only riventy percent chosen by an electorate consisting of heads of families, married w'omen and single persons with incomes.'^ Should a conflict arise among these three institutions, the now moribund Council of the Realm is supposed to act as a kind of court of last resort. In and of itself the constitution is a neutral docu- ment. If consensus obtains among Spanish political groups, the constitution can be made to work, or it can even be modified to fit future needs and avoid potential institutional conflicts. The possibilities for success w'ere revealed during the forty-six day pe- riod from July to September 1974 when Franco temporarily renounced power. Prime Ministei Arias and Prince Juan Carlos demonstrated ti..:t ♦bey could work together; moderate politicians supported them; militaiy^ figures did not intcr\'cnc in civilian politics. V. THE POLITICAL ELITE The viability of the constitution over the longer term, however, will depend upon the commitment and capacity of Spain’s governing classes. Spain has a political elite with sufficient experience to run the countiy^. Some of its members have sers'ed in the government wdiile others have been permitted to exist as a kind of quasi-legal opposition. Nor arc its members associated with older civil war parties; they are younger and middle-aged men with bases in the bureaucracy. National Movement, church, economy and the liberal professions. They * Once named by the monarch, the prime minister ap- parently cannot Ik* dismissed during his five year term of offic'e, unless the monarch obtains the consent of the Council of the Realm. 4 CONFIDENTIAL Approved For Release 2003/05/28 : CIA-RDP86T00608R000600180001-7 Approved For Release 2003/05/28 : CIA-RDP86T00608R000600180001-7 CONFIDENTIAL are a relatively small group with extreme conserva- tive to mildly liberal view-points. For the moment the moderately conserv ative and liberal members of the elite nave given their support to Arias and Juan Carlos in face of the extreme rights influence on Franco, and hope that the piime minister and prince will amend the constitution and laws to permit freer expression and autonomous political groupings after Franco. Although a bureaucrat and former head of the security police, Prime Minister Arias Navarro has staked his prestige upon political reform. As mayor of \Iadrid from 1965 to 1973 he gained a personal reputation of being responsive to popular feeling; after the downfall of the Caetano regime in Portu- gal, Arias sensed the possibility of mild unrest among the political elite, and recognized the need for aperture, Juan Carlos has his own reasons for co-operating with the prime minister. Realizing that monarchy is no longer valued in Spain, and that he himself is not highly regarded, the prince since August has made an effort to establish re- laricnships with poL al figures favoring liberali- zation. These figures come from w'ithin the accepted spectrum of opinion. Because Franco has never allow^ed any person or group to become prominent enough to compete for leadership, Arias and the prince must appeal to a scries of comparatively unknown individuals of moderate disposition, many of v/hom compete for support within llic same in- stitution: each has his own small following or is trying to create it; none is very ideological; and in one way or another all are opportunistic— they wnnt the freedom to form independent political as- sociations so as to gain a wider audience. In the absence of an open political a»-cna, a number of men joined the National Movement in order to fulfill their own political ambitions rather than out of conviction. The best known of these is Manuel Fraga Iribame, who became popular as a progres- sive minister of information and tourism in the 1960s; now ambassador to London Fraga has the financial backing of a few wealthy businessmen. Other influential Movement leaders are Alejandro Rodrigues de Valcarccl w^ho is also president of the Cortes, Manuel Cantarcro del Castillo, who at thirty-seven heads the Falangist youth organization; and Jose Solis Ruiz, who is both a vice-president of the Movement and a former official chief of the syndical organizations. They would use reforms to revitalize the Movement — as well as their own positions — and make it a credible political force in Spanish eyes. Support for reform also exis^’s among eminent Catholics. In fact in an overwhelmingly Catholic country, the church hierarchy, itself, has taken a leading role in the fight for liberalization. Spurred on by the papal encyclicals of John XXIII, the pro- nouncements of the Vatican Council, and an effort to retain the faithful in a secular environment, all levels of clergymen have come to favor civil liberties and rights of free association. At the latest meeting of the Spanish Episcopal Conference in December, only six out of eighty-nine attending bishops dis- sented from a manifesto calling for greater political, economic and social justice. Some bishops have gone so far as to support publically parish priests w^ho provided sanctuary for political protestors. The president of the Conference, Cardinal Enrique y Tarancon, has personally called for competing democratic parties. The lay aim of the church is divided politically. The most controversial Catholic organization in Spain is the semi-secret, elitist Opus Dei. The ma- jority of its members are philosophically conserv^a- tive, support economic change, and rarely take po- litical stands; they have served in the government when called upon as modernizing technocrats. The reform of the Spanish economy is associated w'ith members Laureano Lopez Rodo and Gregorio Lopez Bravo, administrators who were appointed to the cabinet in the early sixties. Within Opus Dei, how'- ever, there is a competing group formed by the new exiled Rafael Calvo Sorer w'hich advocates political liberalization, the separation of church and state, and the institution of free elections. (Although now out of office, Opus Dei members are likely to be influential in the future because of their talent and expertise in business, the professions and governr.'jent ) To combat the conserv'ative in- fluence of Opus Dei as a whole, Federico Silva Munoz resigned from the cabinet in 1970 and worked with the National Association of Catholic Propagandists (A.C.N.P.), a coalition of Catholic activists. 5 CONFIDENTIAL Approved For Release 2003/05/28 : CIA-RDP86T00608R000600180001-7 Approved For Release 2003/05/28 : CIA-RDP86T00608R000600180001-7 CONFIDENTIAL More conventionally Christian Democratic — and participating in the A.C.N.P. — is a grouping of younger men called Tacito, a name derivrf from the group s column in the newspaper Ya, and led by the thirty-nine year old financier, Joaquim Gar- rigues Walker. Garrigues Walker plans to organize a reformist party ‘'with an emphasis on youth, ac- ceptance of existing institutional structures, and a rejection of extremism” He presumably has the backing of his father-in-law, Jose Maria Areilza, the Count of Montrico, a long-time critic of the regime. The Tacito group is displacing the civil war Social Christian Democratic Party’ still headed by the aging but respected Jose Maria Gil Robles. Finally some middle-class professionals banded together after Arias' 1974 promise of reform to create a secular democratic party. Although they call their association the Social- Democratic Union and find their models in European socialist parties, the founders' program reflects a moderate welfare- statist outlook. The membership is youthful, and Manuel Diez-Alegria, son of the politically mod- erate former army chief-of-staff, is a party leader. The Union has a far more significant future than the exiled Spanish Socialist Workers Party (P.S.O.E) in Toulouse, France which is poorly organized in- ternally and now dominated by radical elements. Professor Enrique Tierno Galvan was expelled from the P.S.O.E. in 1965, and speaks for a small group of moderate socialists inside Spain. All these individuals and groups are eager for liberalization. They are essentialy middle-class — though seme have ties to the financial and social elite — seeking middle-class constituencies. In Spain's limited political arena none has had the experience of co-operating in broadly based coalitions, or of building mass party structures that can bridge the gap to alienated working classes. Should reform be enacted, middle-class politicians will find them- selves competing with a well-organized, clandestine Communist party for the allegiance of industrial workers and regional separatists. VL THE WORKING CLASSES AND COMMUNIST OPPOSITION Spanish workers have a long history of radicalism. To control the proletariat which fought against Franco’s armies in the civil war, the Caudillo estab- lished industrial syndicates. Though superv’isory responsibility is shared between the National Move- ment and government, the syndical bureaucracy is manned by conserv’ative Movement hacks. Its de- partments radiate out from Madrid in a netw’ork that includes government representatives, manage- ment and labor, and they are authorized to regulate the collective bargaining process in every major factory. More often than not contract settlements have favored business interests. Feeling that they were not receiv’ing benefits from Spain's economic boom, workers — and only by a very generous in- terpretation of consumption statistics would many Spanish workers be considered middle-class — began to turn the local symdical organizations to their owm advantage in the 1960's. Comisioncs Obreras, or workers' commissions, were formed surreptitiously in larger plants, and labor leaders used syndical electoral mechanisms to place independent representatives on official bodies. Within the syndicates these leaders pressed workers' demands for higher wages, improved con- ditions and — in Barcelona and Catalonia * — greater regional autonomy as well. Despite the efforts of the secret police, commission leadership has man- aged to perpetuate itself and to use the illegal strike as an effective bargaining weapon; protests in- creased in intensity through the decade of the sixties, and even more are predicted for 1975. Because the regime is unable to contain labor un- rest, factor}’ managers have come to prefer dealing with the commissions, rather than the official syndi- cates, in contract negotiations. To date the demands of workers have been largely economic, and the commissions in individual factories do not appear to have yet coordinated their activities with one another on any sustained basis. But as the Arias government cracks down hard on strikes, the clandestine Communist party is making inroads among industrial workers. Indeed, according to the latest reporting, the Communist * WTiile the demands and terrorist activities of rcRionat nationalists, especially in the Basque country, are disruptive, they do not represent a major political problem; even after the assassination of Prime Minister Carrero Blanco in De- cember 1973 by a group of Basque separatists, the regime reacted with moderation and restraint. A successor regime to Franco may have to make some concessions toward grant- ing a measure of regional autonomy, ar:d Arias appear*^ willing to do so. 6 CONFIDENTIAL Approved For Release 2003/05/28 : CIA-RDP86T00608R000600180001-7 Approved For Release 2003/05/28 : CIA-RDP86T00608R000600180001-7 CONHDENTIAL Party of Spain (P.C.E.), headed by the exiled leaders Dolores Ibamiri and Santiago Carrillo, seems to have a decisive lead in the competition for \vorkers’ support." Since the civil war, unions have l^n b^ed, and the exiled socialist and anarchist muons have negligible organizations within Spain. In contrast Secretary-General San- tiago Camllo has maintained a party apparatus believed to have five thousand members, and be- cause cell members are willing to face arrest, suffer harrassment, and generally bear the dangers raised by rommission work, laborers have given Com- munists their allegiance, at least temporarily. How- ever, ^Camllo has not been able to convert the party's popularity among workers into a national political strike. On the whole the P.C.E.’s reputation has been enhanced by Carrillos firm independence of Mos- cow since 1968, and the C.P.S.U.’s 1974 capitula- tion to the Spanish leader in recognizing the ap- propriateness of his national strategies.® Carrillo is using the workers’ commissions to broaden the party s popular base while he attempts to persuade moderate opposition figures to join a united front coalition called the Democratic Junta. Despite some recent overtures to the officer corps, however, he has yet to make the party respectable in its eyes. VII. THE ROLE OF THE /MILITARY The military has had a special role as the guaran- tor of the Spanish state from the time FranTO was selected to head the nationalist forces in 1938. Senior officers have been incorporated in the regime as cabinet ministers, members of the national council and appointees to the Cortes. Generals and admirals of Franco’s generation have always had a firm commitment to the conservative outlines of the regime, but the officer corps has changed beneath them. Since the advent of American aid in the early fifties, elite social recruitment has declined in favor of middle- and lower middle-class types who are dependent upon their careers as sources of income. The complaints of the majority of these •Communists apparently have a firm edjre on soc.alist Catholic and separatist competition for workers’ support. • For a time Moscow supported the more pliable, break- away facUon headed by Enrique Lister. Carrillo’s inde- pendence was made possible by the money he receives from anti-Franco exiles in Latin America and Europe. twenty thousand officers have been largely pro- fessional: they resent slow promotions caused by a strict seniority system, long assignments in posi- tions of little responsibUity, poorly equipped troops, and very low salary scales — ^which compel ap- proximately fifty percent of Spanish officers to hold second jobs. As compared to civilian engineers and administrators the financial rewards of military professionals have diminished, but the assurances of guaranteed promotions and fringe benefits still make the services an attractive career. Whether there is significant political discontent among Spanish officers is less clear. The military has not directly intervened in civilian politics since the civil war, but little is known about the politi- cal composition of the officer corps, factional splits within it, or the ideological preferences of commanding figures. All generals and admirals fought in the civil war and the extreme rightists amoig them retain an undue influence as old allies o*^ Franco and his family; others seem more mod- erate, and appear to support orderly civilian change. Immediately after the assassination of Prime Minister Carrero .Blanco in December 1973, the now retired chief-of-staff, Lieutenant-General -Manuel Diez-Alegria, and his successor. General Fernandez Vallcspin, formed a crisis management group to curb the excesses of military rightists. They wnre aided by a younger generation of officers who had attended the staff school under Dicz- Alcgria’s principalship. To the left, a miniscule group of junior officers was impressed by the changes wrought by the new military govern- ment in Portugal immediately after the April coup. In any event, concern among military- leaders about officers joining any future political associations has grown enough for the three service ministers ( army, navy, and air force) to warn all officers against personal involvement in politics. Without Franco to protect the officer corps’ interests, its response during a period of transition still remains an un- known quantity’ in Spanish politics.^ VIII. STRESSES AND STRAINS Franco’s heirs will have to deal with a new set of pressures upon the political system. Ihc economic 'Arias .sensed this, and his first major defense policy speech contained a promise to upgrade the navy's equip- ment. 7 CONFIDENTIAL Approved For Release 2003/05/28 : CIA-RDP86T00608R000600180001-7 Approved For Release 2003/05/28 : CIA-RDP86T00608R000600180001-7 CONFIDENTIAL boom is apparentiy over. Spain is almost totally de- pendent upon external energy supplies, and the cost of importing them has more than tripled to nearly four billion dollars in 1974. Real GNP growth has fallen from eight to four percent, and infla- tion has reached seventeen percent — the worst since the civil war. Income from tourism and emigrant remittances is stagnating at four and one- half billion dollars, and no longer covers the gap between export earnings and import costs; Spain’s current account deficit in 1974 was three and one- half billion dollars. The government is trying to keep unemployment levels low, but should produc- tion continue to fall and emigrant laborers be forced to return from w^estem Europe, unemploy- ment is likely to climb far above the officially ad- mitted 1.8 percent. On the bright side, Spain’s foreign reserve position and credit rating remain good, and if emigrants do not return in large numbers, problems will be manageable for the next two or three years. But should the economic dow-ntum become severe, a successor regime will have few*er oppor- tunities to satisfy diverging interests. The new middle-class, fearful of losing its recently won possessions, would become suspicious of any changes that might seem to reduce its share of the economic pie. At the same time, the working class would demand more, and there would be fcw'cr monetary and job benefits to give them. Industrial unrest w'ould increase. In such conditions, politi- cal leaders might have too httlc time in which to learn the skills of accommodation, compromise and party-building needed for a stable transition. Perhaps, too, the externally motivated incentive to acquire these political skills may be diminishing. In tlic past, an important factor contributing to the support for reform among Spanish politicians w'as the desire to gain respectability for their nation in western Europe, along wdth admission into the Common Market and NATO. But the ap- jxjal of Europe may be foundering; European economies have been weakened and made vulner- able by the energy crisis, and constitutional govern- ments seem less able to contain the threats of mass strikes, domestic Communism and separatist terror- ism in Spanish eyes. The post-Franco leadership — especially a rightist one — might feel less impelled to redeem Spain's reputation among the trouble- plagued European democracies. Most significantly, attitudes tow’ards the funirc may become less flexible as a result of the Portu- guese revolution. The extreme right — with large demonstrations and new organizations — has ready indicated its unwillingness to accept any basic political reforms lest a similar revolution occur in Spain. In contrast, moderate elements arc insistent that changes be enacted quickly to prevent such a revolution. Arias w^as in the latter camp wiien he attempted to add more bite to the associations law^ after the April coup in Portugal. The right thw^arted his effort, as wxil as his plans to alter the electoral and syndical systems. For as long as rranco lives, uncertainty and stalemate will prevail. The ailing dictator remains the arbiter of Spanish politics. Right-wing friends and family are monopolizing his attention, while moderates are biding their time and waiting for the end. Neither group expects to see Franco again demonstrate his old flexibility of favoring one faction and then another to create political balance. If Franco lingers on . . . The longer Franco lives — whether he formally relinquishes power or not — the less easy and obvious the outcome of the transition is likely to be. As it continues to influence Franco’s thinking, the extreme right will grow more confident about the future. Some of its members arc even now pre- paring to take advantage of the new' association law'. Moderates arc divided and w'avering; men like Fraga Iribarne arc willing to try their hands at forminr organizations while others are hesitant and fear that any connection to the National Move- ment wll hurt their chances of winning support from the electcjate. The extreme right will gain an edge in organization-building, and seek to rally the support of a middle-class afraid of losing its economic position. 'Through Franco, the right will continue to bring pressure upon the Arias govern- ment, and probably will cause the prime minister to tighten press law's and to halt any significant syndical and municipal electoral reforms; the IX. THE FUTURE 8 CONFIDENTIAL Approved For Release 2003/05/28 : CIA-RDP86T00608R000600180001-7 Approved For Release 2003/05/28 : ClA-RDPSef OOebSROOOeOOl 80001 -7 CONFIDENTIAL prince has no clout with which to counter such moves, and his reputation, already shaky, is apt to dimhiish. Rightist elements are almost certain to exert even more pressme on the government in hopes of bringing about Arias' resignation. If Franco lingers on over the next two or three years, Spain will become even more polarized: the political right and petit-bourgeois interests will be ascendent; moderate politicians will be alienated; the working classes will be further radicalized, and the Communists will grow stronger among them. Under these conditions labor unrest is bound to escalate, and the right — ^with or without Franco by then — ^may not be able to control it. Either called in by the government or on their own in- itiative, the armed forces would then enter politics to restore order. With the assumption of civilian functions, groups of officers resenting the burden of underwriting an isolated and ineffectual dictator- ship in western Europe, might feel impelled to re- form Spain fundamentally. Spain could then expe- rience the abrupt and cataclysmic turn-about of 1974 Portugal. If the Caudillo dies soon . . . But if Franco dies within the next twelve to eighteen months, the chances for a stable transition are better. Barring the unlikely event of a last- gasp right-wing c >up attempt — the military would probably react vigorously in the face of unconsti- tutional actions from any quarter — ^Arias and Juan Carlos will have the opportunity to solidify their support among moderate and less intransigent polit- ical groupings. During the lull provided by a period of national mourning, bargaining and compromises that would bring prominent figures into government could be reached. And acting on his earlier policy statements. Arias* new cabinet could present a pro gram that in the guise of a modem 'Trancoism” wc jld permit more electoral and party representa- t?.;n in the Cortes, some syndical reform and a dv gree of regional autonomy. No politician or fac- tio \ is as yet strong enough to replace Arias or totally thwart such a program; the military will not be inclined to interfere with civil affairs immediately so long as public order is preserved, and the Com- munists will try if they can to dilute workers* de- mands in order to win political respectability. But the initial stages of the transition in the year or so after Franco will be characterized by tension, muted conflict and wary steps towards a new political balance. Even should Franco die scon, difficulties will emerge: will Spanish politicians be able to restrain their personal ambition and competitiveness for the sake of greater national good? Will they be able to forego grandiloquent gestures and high- flown rhetoric for the stolid work of daily political compromise and the nitty-gritty of party-building? Coming out of the shadow of Franco, die skills of prominent Spanish politicians are untried. In the past individual ambition and an instinct for behind- the-scenes maneuvering sufficed, and at first many will probably be content with the recognition brought by cabinet positions. Jjs associations or parties are formed, open politicking vdll mean little more than collecting splintered votes from a conservatb^e middle-class; real competition will continue to be conducted out of public view among prominent individuals and factions. But the politi- cal system will be a more open, fluid form of authoritarianism than under Franco. The gap between the regime and the working classes remains to be bridged, and political leaders will have to see that it is in their own self-interest to accommodate labor and linked regional demands. The more thoughtful among them — ^including Arias along with Fraga, Garrigues Walker, the younger Diez-Alegria and a majority of the hierarchy — have already advocated a kind of trade-unionism that would allow workers to organize locally and negotiate contracts at their factories; they are gambling on proletarian energies becoming ab- sorbed in legal activities, and so diminishing labor’s vulnerability to Communist and other radical in- fluence. It is a risky business, because the workers’ commissions are likely to increase their strikes during the transition period, and politicians will have to be persistent in the face of strong opposition from the right-wing. While the extreme right nc doubt will try to sway sympathetically inclined old time officers, the military will hesitate to inter- vene in civilian politics so ^ong as the government appears moderate in its views, capable, and main- tains a firm grip over public protest. CONFIDENTIAL Approved For Release 2003/05/28 : CIA-RDP86T00608R000606l80001-7 Approved For Release 200^j^|;^fq^)^-RDP86T00608R000600180001-7 Even should appropriate labor legislation be passed, the gap between the establishment and the workers will still exist. However, labor is not united enough to bring the nation to a total halt as in France or Italy and thus raise the specter of another civil war. And if domestic peace is not shattered completely, the military would continue in its role as guarantor of the regime. Both officers and civih’ans share a commitment to the general outlines of Francos state. The majority see room for moderate, legally enacted reforms,® and all are fLmly anti-Communist — the party will be banned as it is now. Relations between the military and government are likely to be closer after Franco; without the presence of a reassuring, mediating figure, an informal consulting arrangement can be expected to grow up, and the prime minister and prince would take the precaution of approaching senior officers before making any major, unexpected 25X1 CONFIDENTIAL Approved For Release 2003/05/28 : CIA-RDP86T00608R000600180001-7 policy moves. Unless unforeseen pohtical and eco- nomic forces were to appear on the scene, Spain would manage to achieve a loose, flabby sort of stability.® In any event, the leaders of post-Franco Spain will for some time be pre-occupied with internal political and economic problems; and while they would welcome admission into NATO and the EC, they will be prepared to bargain hard for concrete security and commercial benefits. They will watch events in Portugal with concern, continue to cul- tivate relations with the Communist and Arab worlds, and — ^perhaps as a symbol of Spanish in- dependence — give voice to a loud but superficial mti-Americanism.